The White House on Thursday released a budget including revenues based on an assumption that a cap-and-trade program limiting greenhouse gas (“GHG”) emissions will be in place by 2012. According to the budget document, the assumed cap-and-trade program has emission targets requiring GHG emission reductions of 14 percent below 2005 levels by 2020 and 83 percent below 2005 levels by 2050. All of the mandatory GHG allowances would be auctioned and none would be allocated at no-cost to firms that produce GHG emissions. The program would generate nearly $650 billion between 2012 and 2019 of which $150 billion would be utilized to fund “clean” energy technologies over ten years starting in 2012. About $80 billion of the auction revenues would go toward funding the proposed middle-class tax cut each year also beginning in 2012.
No details of the proposed cap-and-trade program were made available, and the proposal drew sharp reaction from both sides of the aisle. One area of concern was whether the Administration will attempt to seek to legislate the cap-and-trade program through the budget reconciliation process, which does not allow for filibusters and where passage in the Senate, therefore, could be secured with a simple majority and not the 60 votes needed to invoke cloture as with normal legislation.